Two buzzwords that keep popping up in all my magazines is ďDisruptive Change.Ē We all know that change is inevitable. However, disruptive change has taken on a whole new priority for entrepreneurs and start-up companies with the emergence of cheap computing power and the growth of the Internet.
In centuries past, most change in specific industries happened quite slowly. We humans inherently resist change and as recently as forty years ago a solid case for change may have taken even decades from ďidea to market.Ē Not so today! Hundreds of thousands of workers get up every morning in this new era of innovation, looking to incubate the next great idea and disrupt how entire industries will function.
For every winning disruptive change, there are hundreds of thousands of individual victims, who have the potential to lose a job they held for the last twenty years. Letís take a look back in recent history, to better prepare for the inevitable disruptive changes of the future.
Back in 1982, a mere 25 years ago, I used to pay a brokerage commission to Janney, Montgomery, Scott a hefty sum of around $250 to purchase a few hundred shares of stock listed on the NYSE. It would cost substantially more to purchase a few thousand shares. I would then be charged another $250 upon selling the stock. Itís easy to see why the phrase day-trader did not exist back then. Letís fast forward to 2007 and it now costs around $8.95 to trade with name brand brokerage houses whether you purchase two hundred or five thousand shares. Credit disruptive software programs and the Internet for trimming the number of stock brokers substantially, while daily trading on the NYSE has grown 20 fold in the last 25 years from around 100 million shares a day to over 2 billion shares today. This business is changed forever!
The same type of tsunami swept through the travel agency business in the last 25 years. Travel agents were plentiful in 1982 and this was a very profitable business back then. Almost every airline ticket was booked through a travel agent as well as most vacations including hotels, car rentals and cruises. Today, the retail public probably books 85% of their own flights online. And despite the exponential growth of air traffic since 1982, travel agents remain on the endangered species list, and probably would be extinct if it werenít for their corporate clients who use their services.
More recently, we are witnessing newspaper and magazine advertising revenues deteriorate by the day. Iíve been a subscriber of Computer Shopper Magazine when it was a behemoth of a publication twenty years ago. It was a massive magazine; more than twice the physical size of a typical magazine; with about 500 plus pages; and weighed around ten pounds. I still subscribe to this publication today. It's half the physical size and lucky to have 100 pages. Many advertisers have jumped ship from publications like PC Magazine, BusinessWeek, Newsweek, and US World News and are spending their advertising dollars with Google who disrupted a powerful industry with their search prowess. Print publications in general have been wounded badly by disruptive changes and will never be the same.
The next industry that might be in for a cleansing is the home real estate marketplace. Disruptive technologies online continue to make it more difficult to justify the commissions Real Estate Brokers and Associates split; as well as the fees charged by appraisers; title companies; mortgage companies; lawyers: and everyone else involved with the conveyance of real property. Wherever there are excessive charges, one can expect a disruptive technology will follow like a shark on the trail of blood.
Even powerful professional organizations such as National Association of Realtors; the American Medical Association; or the National Education Association canít hold off disruptive change forever. While these organizations view most change as if itís initiated by the devil, they canít resist the title waves of future change. Somewhere, someplace, someone is dreaming up a way to make even the toughest industries to penetrate more efficient and cost effective for its constituents. For a true democracy to work, the interests of the ďpeopleĒ MUST come first and foremost. And cheap computing power plus the Internet may eventually cleanse the excesses and inefficiencies we are all forced to live with and turn some industries on their heads. Being in the right industry; as well as the right job at the right time has never been more important. Stay abreast of the latest disruptive changes forming in the incubators today Ė in order to become a benefactor of change instead of a victim.